Wesley Company manufactures and sells a single product. The company's Income statement at sales level of...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Wesley Company manufactures and sells a single product. The company's Income statement at sales level of 27,000 units for last quarter follows: Total Sales Less: Variable expenses Contribution margin Less: Fixed expenses $1,880,eee 756,000 324,e00 263,736 Net operating income 6e, 264 Required: 1. What is the monthly break-even polnt in units sold and In sales dollars? (Round your Intermediate calculations and final answers to the nearest whole number.) Break-even Point Break-even point in units sold Break-even point in sales dollars 2 Without resorting to computations, calculate the total contribution margin at the break-even polnt for the quarter. Total contribution margin 3-a. How many units would have to be sold each quarter to earn a target profit of $21,600? Use the formula method. Units sold to attain target profit 3-b. Verify your answer by preparing a contribution format Income statement at the target level of sales. Total Unit Sales 285,338 4. Refer to the orlginal data. Compute the company's margin of safety for the quarter In units, In dollars and as a percentage of last quarter's sales. (Round "Percentage" answer to 1 declimal place, (1.e., 0.123 should be considered as 12.3%).) Units Dollars Percentage Margin of safety 5. What is the company's CM ratio? If quarterly sales decrease by $92,800 and there Is no change In fixed expenses, what would you expect the quarter's net operating Income to be? (Do not prepare an Income statement, use the CM ratio to compute your answer.) CM ratio Net operating income Wesley Company manufactures and sells a single product. The company's Income statement at sales level of 27,000 units for last quarter follows: Total Sales Less: Variable expenses Contribution margin Less: Fixed expenses $1,880,eee 756,000 324,e00 263,736 Net operating income 6e, 264 Required: 1. What is the monthly break-even polnt in units sold and In sales dollars? (Round your Intermediate calculations and final answers to the nearest whole number.) Break-even Point Break-even point in units sold Break-even point in sales dollars 2 Without resorting to computations, calculate the total contribution margin at the break-even polnt for the quarter. Total contribution margin 3-a. How many units would have to be sold each quarter to earn a target profit of $21,600? Use the formula method. Units sold to attain target profit 3-b. Verify your answer by preparing a contribution format Income statement at the target level of sales. Total Unit Sales 285,338 4. Refer to the orlginal data. Compute the company's margin of safety for the quarter In units, In dollars and as a percentage of last quarter's sales. (Round "Percentage" answer to 1 declimal place, (1.e., 0.123 should be considered as 12.3%).) Units Dollars Percentage Margin of safety 5. What is the company's CM ratio? If quarterly sales decrease by $92,800 and there Is no change In fixed expenses, what would you expect the quarter's net operating Income to be? (Do not prepare an Income statement, use the CM ratio to compute your answer.) CM ratio Net operating income
Expert Answer:
Answer rating: 100% (QA)
nswer 1 Break even point Break even point in units sold 21978 units Break even point in sales dollar... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
Posted Date:
Students also viewed these accounting questions
-
The Herald Company manufactures and sells a single product which sells for $50 per unit and has a contribution margin ratio of 30%. The company's monthly fixed expenses are $25,000. If Herald desires...
-
1. Boynton Company manufactures and sells a single product that sells for $480 per unit; variable costs are $300. Annual fixed costs are $990,000. Current sales volume is $4,200,000. Compute the...
-
Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 30,000 Rets per year. Costs associated with this level of production and...
-
1. Analyze whether Thomas can recover his mReport You Need To Prepare: You must prepare a report addressed to Winnie and Ralph. Winnie and Ralph will use the report in discussion with the Clean...
-
Explain how the following items would affect consolidated net income in the year a subsidiary is purchased and in the year after: a. Impairment of the value of goodwill. b. Land with a carrying...
-
Describe wet processing of composite materials.
-
An object of characteristic length \(L=0.5 \mathrm{~m}\) is \(10^{\circ} \mathrm{C}\) warmer than the surrounding fluid, which is flowing at a velocity of \(0.5 \mathrm{~m} / \mathrm{s}\). Graph the...
-
This case provides a comprehensive and realistic review of WACC computations and some of the theoretical questions related to the WACC and its uses. 1. Compute the yield to maturity and the after-tax...
-
Locklear Partners started a new business on July 1, 2021. That same day, Locklear Partners also received $90,000 of cash from issuing common stock and borrowed $80,000 from a friend. On July 1, 2021...
-
Fultz and Hunter form a partnership on January 1, 2018, contributing $59,000 and $20,000, respectively. The partnership had net income of $164,000. Based on the partnership agreement, Fultz's share...
-
In connection with your audit of Big Brother Corp. for the year ended December 31, 2014, you gathered the following information: Current account at Bank of the Philippine Islands P6,000,000 Current...
-
Monetary policymakers use several tools to meet their objectives. a. The best tools are observable, controllable, and tightly linked to objectives. b. Short-term interest rates are the primary tools...
-
Individually or in groups, select a business problem you can learn more about by conducting survey research. You will create an online survey for all of your classmates to take, so design your...
-
The European Central Banks primary objective is price stability. a. The ECB provides liquidity to the banking system both through open market purchases of securities and through auctions called...
-
Unconventional monetary policy is less predictable than conventional policy and potentially disruptive, so it is used only when the conventional toolkit is insufficient to stabilize the economy. One...
-
Central banks have three principal tools of unconventional monetary policy: a. Forward guidance: communication regarding expected future policy target rates. b. Quantitative easing: supplying...
-
All of the following are responsibilities of the Equal Employment Opportunity Commission EXCEPT: monitoring hiring practices. O writing and passing new laws. investigating and resolving complaints. O...
-
Chao, Louis, and Mari, unrelated individuals, own all of the shares of Cerise Corporation. All three shareholders have been active in the management of Cerise since its inception. In the current...
-
How will relating product contribution margin s to the amount of the constrained resource they consume help a company maximize its profits?
-
Distinguish between the following (a) Direct materials (b) Indirect materials (c) Direct labor (d) Indirect labor and (e) Manufacturing overhead.
-
The following changes took place during the year in Pavolik Companys balance sheet accounts: Long-term investments that had cost the company $6 were sold during the year for $ 16, and land that had...
-
Explain how the financial manager might use industry norms in the design of the companys financing mix.
-
You have developed the following income statement for Sing-Tel Corporation. It represents the most recent years operations, which ended yesterday. Your supervisor in the controllers office has just...
-
Footwear, Inc. manufactures a complete line of mens and womens formal shoes for independent merchants. The average selling price of its finished product is \($85\) per pair. The variable cost for...
Study smarter with the SolutionInn App